New Delhi

The National Consumer Disputes Redressal Commission (NCDRC) has directed Axis Bank to pay Rs 3.19 crore to a Delhi-based logistics firm, holding the bank guilty of “deficiency in service” for refusing to accept demonetised currency notes for deposit during the 2016 demonetisation window.

The commission, comprising presiding member AVM J Rajendra and judicial member Anoop Kumar Mendiratta, was hearing an appeal filed by Procure Logistics Services Pvt Ltd against the bank.

In an order dated March 10, the commission said the bank had failed by repeatedly disallowing the complainant to deposit the notified cash into its own KYC-compliant account despite multiple requests until the entire permitted timeline lapsed.

The case relates to the period following the government’s announcement of demonetisation on November 8, 2016, when old currency notes were allowed to be deposited in banks for a limited window.

The commission observed that nothing prevented the bank from accepting the cash and reporting the transaction to authorities if it suspected irregularities.

“If the transactions appeared suspicious, the bank was required to monitor and report them to the competent authorities. The statutory framework did not empower the bank to unilaterally refuse acceptance of deposits in a KYC-compliant account during the permitted window,” it said.

According to the panel, the refusal deprived the company of the only lawful opportunity to deposit the demonetised currency within the notified period, causing a direct and irreversible financial loss when the specified bank notes became worthless after the deadline expired.

“This clearly constitutes ‘deficiency in service’ as defined under Section 2(1)(g) of the Consumer Protection Act, 1986,” the commission said, adding that acceptance of deposits in duly maintained accounts was an undisputed core banking service.

The NCDRC directed Axis Bank to pay Procure Logistics Services Pvt Ltd Rs 3.19 crore with simple interest at six per cent per annum from December 30, 2016, until the date of payment.

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The commission also ordered that the amount be paid within two months, failing which the bank will have to pay interest at nine per cent per annum for the delayed period.